Freshfields to make savings of £14m as pension reforms kick in

Freshfields Bruckhaus Deringer is set to make savings of almost £14m as part of the magic circle firm's radical pension reforms.

Thirty plateau partners aged 50 or over retired from the partnership last week to take advantage of more favourable pension terms.

As first reported on www.thelawyer.com (1 November), out of these, 24 partners opted to become principal consultants, while the rest chose to leave the firm.

Plateau partners are each on 50 points, which last year were worth £19,600. The departure of retiring partners will see 1,500 equity points removed from the system. This is equivalent to a massive saving of £29.4m.

Principal consultants will be on individual packages, but it is understood that each will earn an estimated £650,000, costing the firm £15.6m.

Based on these calculations, Freshfields is expected to save approximately £13.8m.

Freshfields radically overhauled its partners' pension scheme in April, with some accepting that they may receive as little as 60-65 per cent of their entitlement.

Under the new Freshfields pension scheme, partners will receive an index-linked amount per point over a period of at least 10 years, after which payments will be reduced to zero.

Freshfields previously operated an unfunded pension scheme, whereby contributions were made into the funds out of annual profit, subject to a 10 per cent cap on annual profit.